Court Strikes Down FCC Net Neutrality Rule

The court noted that the FCC simply lacked the authority to impose those kinds of regulations on providers.

by MICHAEL A. LINDENBERGER, MCCLATCHY NEWS SERVICE
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January 15, 2014

The idea that the Internet should be equally available to everyone suffered a major setback Tuesday. A U.S. appeals court struck down federal rules that had barred broadband providers from favoring some sites and slowing down or blocking others.

The ruling will give significant flexibility to Dallas-based AT&T and other broadband providers, freeing them to craft deals with companies willing to pay so they can give their customers a faster or cheaper online experience.

But it also threatens to change the basic way the Internet has operated, giving broadband providers a new veto over content to which they object, either for business reasons or because of pressure from the government or consumers.

Those fears lit up the Internet and Twitter as soon as the 2-1 ruling by the U.S. Court of Appeals for the District of Columbia was issued midday Tuesday, even as major providers promised no big changes were in the works.

“AT&T has been committed to the open Internet since our endorsement of the FCC’s statement of Internet freedoms in 2004,” the company said in a statement attributed to its top official in Washington, Jim Cicconi.

“AT&T can assure all of our customers and stakeholders that our commitment to protect and maintain an open Internet will not change.”

Net Neutrality At a Glance

The Internet from the beginning has been like a subway with equal access for all. You have a ticket, you ride, you travel at the same speed, everyone puts up with the same congestion. It’s messy but fair. That’s the result of something called “net neutrality.”

But that changed yesterday with a court ruling that struck down net neutrality, and now the Internet may change into something that looks more like an airline, with first class, early boarding, extra foot room and other perks for those willing to pay for it. In fact, some fear that the Internet may go even further along the airline analogy. With no net neutrality, if you book on one airline, you won’t be allowed to connect to another airline.

Among those who were disappointed by the court decision was the American Library Association, a long-time proponent of net neutrality. “Now that the Internet has become the primary mechanism for delivering information, services and applications to the general public,” said American Library Association President Barbara Stripling in a release, “it is especially important that commercial Internet Service Providers are not able to control or manipulate the content of these communications.”

She went on to say that approximately 77 million people use public library Internet access every year, and that people deserve equal access to online information and services.

And when it comes to community-owned networks, the Twin Cities Daily Planet from Minneapolis-St. Paul, Minn., wrote that, “Communities cannot trust Washington, D.C., to ensure that residents and local businesses have universal, fast, affordable, and reliable access to the Internet. Communities should be investing in themselves to build networks that are accountable to the public and will not engage in anti-consumer practices merely to maximize their profits. Such behavior is inappropriate on matters of essential infrastructure.”

As for what the court means? It "paves the way for changes in Internet service business models in the future," CNET reported. "And that could have a huge effect on the services that consumers use.” Broadband and backbone Internet providers could begin charging internet companies like Netflix, Amazon or Google to access their networks, the news outlet reported, and providers could grant priority access to ensure streaming services don’t buffer when they encounter network congestion.

All this flies in the face of a 2010 Government Technology article, which opined that the FCC rules would ensure an open Internet forever. Yesterday’s court decision changes all that.

The company declined to discuss how the company might use the freedom granted by Tuesday’s ruling, however.

Innovation Argument

Verizon, which had sued the Federal Communications Commission to challenge its rules, attempted to tamp down fears about changes.

“One thing is for sure: Today’s decision will not change consumers’ ability to access and use the Internet as they do now,” the company said in a statement. “The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet.”

But advocates for so-called net neutrality — the doctrine that requires Internet providers to grant access on equal terms — said the ruling potentially alters everything about how customers use and access Internet content.

“Here’s the worst-case scenario,” Harold Feld, of Washington-based public interest group Public Knowledge, said in an interview. “Instead of the Internet working the same for everyone no matter who their provider is, as it does today, it becomes different for everyone depending on who provides your service.

“Let’s say AT&T makes a deal with Amazon Prime, then suddenly it’s harder to get Netflix if you’re an AT&T customer,” he said. “Maybe Verizon goes with Netflix and their customers can’t get Amazon. Well, what if you like Amazon?”

In its opinion, the court noted that those kinds of choices could be disruptive for consumers in the short term, but it ruled that the FCC simply lacked the authority to impose those kinds of regulations on providers. Only Congress can do that, wrote Circuit Judge David S. Tatel.

FCC’s 2010 Ruling

The debate over net neutrality has been an off-and-on firestorm in Washington for most of the past decade. Former Sen. Kay Bailey Hutchison of Texas was a leading opponent of the concept because she said it hindered companies like AT&T from innovating and striking deals that would benefit their customers.

Over her and others’ objections, the FCC ruled in 2010 that providers could not block access to sites and that they must disclose how they manage bandwidth use among their customers.

Verizon sued, arguing that the FCC does not have authority to regulate broadband companies. It lost that broader argument Tuesday, with the court unanimously agreeing that the FCC does have general authority to set some terms for how broadband Internet access is made available to consumers.

FCC Chairman Tom Wheeler, who began his term Nov. 4, did not say Tuesday whether the commission will appeal the ruling or seek to draft new rules that might survive judicial scrutiny.

“We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans,” Wheeler said in a statement.

Even ahead of the ruling, AT&T announced last week that it would begin offering “sponsored data” to some sites that pay AT&T, and in return AT&T won’t count data use associated with using the sites against its customers’ monthly limits. That’s a win for consumers, AT&T stressed last week. Critics worried it will mean other sites are disadvantaged.

Feld also said the ruling opens the door to consumers and government officials alike demanding that certain kinds of objectionable but legal sites be blocked, and he warned that companies like AT&T will find resisting those voices difficult.

AT A GLANCE: What the Decision Means

Major broadband providers say that Tuesday’s ruling won’t trigger any immediate changes. But advocates for net neutrality say companies have gained enormous power to change the way the Internet works. Here are three examples of how that might come about:

-- A carrier such as AT&T could strike a deal with a video-streaming service to make it faster or cheaper for AT&T customers to watch certain movies. That might benefit customers who like that particular service but could make it harder or even impossible to view movies offered by a competing service.

-- Verizon could decide that most of its customers do not want to see a program like Duck Dynasty or Breaking Bad and block online streaming of those programs. To see them, Verizon customers would have to seek out a new broadband provider willing to show that content.

-- When the U.S. government sought to shut down WikiLeaks, it asked banks to voluntarily block transactions involving the website. Under the new rules, some advocates worry that similar pressure could lead Internet providers to simply block access to sites objectionable to the government or others.